Archive for May, 2018

Looking at news outlets, the current state of the Canadian real estate market can seem pretty doom and gloom. Interest rate increases combined with new Canadian mortgage rules and a declining housing market have presented challenges, to be sure, but could there also be an advantage?

While the housing market has been slowing so far in 2018, the flipside is that houses have become more affordable. For instance, the Teranet-National Bank House Price Index reported in the final quarter of 2017 that the housing affordability measure fell 0.2 per cent. This is the first time that’s happened since the second quarter of 2015.

Even as we are seeing interest rate increases and stricter Canadian mortgage rules, Canadian wage growth is going up. Increased wages and more affordable housing could definitely present real estate sales opportunities if your target market is affected.

Changes to the Canadian real estate market can also be navigated with flexibility, for example, shifting your target market to adapt to new trends. The Teranet Market Insights report March 2018 edition reported that condo demand continues to be high, particularly in Toronto. Not only that, but new condo development is also remaining strong.

According to the Canadian Press, some families are actually choosing smaller living over larger suburban dwellings. Families of five are living in 1,000 sq. ft. condos, or 950 sq. ft. houses. The right buyer might be tempted to consider some out-of-the-box housing arrangements.

BuzzBuzz News Canada reports that there is still more demand in the Canadian housing market than supply, meaning many real estate agents are seeing more buyers than sellers. If that’s the case for you, you can take advantage. Use property valuation tools to identify selling opportunities in your target area and identify new leads.

Another advantage of these changes is that real estate sales professionals aren’t the only ones dealing with them. Mortgage brokers and mortgage lenders also have to work with the same constrictions and they’re developing products to meet shifting demands. You can take advantage of this by making these industry connections. When you know how mortgage professionals are adapting, you can have more options to offer your clients who might be seeking financing.

It’s difficult to say exactly where the Canadian real estate market is headed in 2018, but you can find a way to adapt and perhaps profit even more from recent changes. Understanding your target market is key to identifying new opportunities. Technology, like GeoWarehouse, puts vital property data at your fingertips so you can quickly and efficiently access the information you need to know when you need to know it.

Not only that, but the GeoWarehouse store also provides important fraud detection resources, like Parcel Registers* and Instrument Images*. These tools let you find out whether there’s an encumbrance, such as a lien or an undisclosed mortgage, on a property so you’re not caught unaware.

Not a GeoWarehouse subscriber? You can become one today. It’s easy — just visit www.geowarehouse.ca to learn more.

* An official product of the Ontario government pursuant to provincial land registration statutes.

The Canadian commercial real estate market is continuing to boom, according to a new report from CBRE Ltd.

In 2017, Canada’s commercial market set another record for investments — one of only four countries in the world to do so.

According to the report, there were $43.1 billion in commercial investments last year (this was more than 2016, when there were $34.7 billion). CBRE is predicting 2018’s investments will be even higher.

If you’re in the real estate selling or developing business, this is good news, particularly as new Canadian mortgage rules and increasing interest rates affect residential real estate.
CBRE Ltd. found that Vancouver and Toronto had the lowest downtown office vacancies in North America at the beginning of 2018. Toronto had 3.7 per cent and Vancouver had 5 per cent. The report predicts those rates will fall even lower this year as tenant demand increases.
For those located outside of these major cities, there’s good news, too. CBRE says this trend is spreading across the country. Montreal posted more than 1.9 million sq. ft. Of positive net absorption in 2017, which the report says is a record amount of tenant demand. London, Ont., the Waterloo Region, Ottawa, and Halifax could all be seeing increased demand for downtown office vacancy.
There is also more to gain in rental payments. In 2017, national industrial average net asking rents reached an all-time high of $6.97 per sq. ft.

The report also points to another interesting trend — the demand for land. Land sales will continue to set pricing records in a variety of markets across Canada, it says. The combination of record low office vacancy and industrial availability could also spur new construction.

If you’re not already selling commercial real estate, this could be the time to consider starting. What downtown office vacancies exist in your market? Are there any future construction projects in the works? These could turn up new real estate leads.

There could also be opportunity even if you’re not selling in a major market. If you know that downtown office space is tight in Toronto, but you sell in outlying areas of the GTA, consider advertising any vacant office space that exists outside the city limits.

If you are already selling Canadian commercial real estate, or considering expanding your real estate markets, the CBRE report can be a great resource as it dives deep into real estate trends by city. You can access the report here: https://www.cbre.com/research-and-reports.

Another great resource whether you’re selling commercial or residential real estate? GeoWarehouse. Our reports, images, and searches maximize your understanding of a property’s attributes and value and minimize uncertainty in completing land transactions.

When you get a new real estate listing, you want to get it on the market as quickly as possible. But before you can do so, there are steps you need to take — specifically, property investigation.

Investigating a new real estate listing can take up a lot of time and money. But there are ways to speed up the process and save big.

Consider these tips to create a more efficient due diligence process:

Check how much other homes in the neighbourhood sold for.

Knowing how much other houses in the area have sold for can give you a good idea of how your new listing stacks up. Technology makes this easier than ever. For instance, the GeoWarehouse Comparable Sales Report lets you perform a property search by radius, sales time-frame, and price range.

Find out what previous buyers got for their money.

Sales history data can help you uncover how much previous buyers paid for your new listing. These figures can be found in tools such as the GeoWarehouse Property Details Report.

Track area house price trends.

Perhaps you want to cast a wider net than just the neighbourhood and see how the city is forecasted to change. Reports, such as the Teranet House Price Index (HPI) can give you a city-wide, provincial, and even national look at home price trends.

Use AVMs to quickly get an estimated valuation.

Automated valuation models (AVMs) can give you an idea of what a property is worth almost instantly. Tools like the GeoWarehouse Property Details Report or the Client Report can provide MPAC assessment data, Land Registry information, pictures of the property, and more.

Check if instruments are registered against the property.

If the property has a lien, multiple mortgages, or another instrument registered against it, you’ll want to know about it. That’s where the GeoWarehouse Parcel Register* comes in. This real time, up-to-date report lets you exercise due diligence by identifying registered encumbrances and obtaining an instrument number.

* An official product of the Ontario government pursuant to provincial land registration statutes.

Look at neighbourhood demographics.

Demographic data can tell you who lives in the neighbourhood — age distribution, marital status, owned/rented properties, average household income, and more. This can help you target your marketing and understand what buyers might be attracted to the neighbourhood and the listing. GeoWarehouse’s Demographics Report puts all this information at the tip of your fingers.

Some important property information can be gained by simple footwork — driving around the neighbourhood, walking through the house, etc. — but technology is letting you delve deeper, faster. Tools, such as the ones provided by GeoWarehouse, give you a new level of due diligence that can help you investigate real estate listings and determine property valuation quicker than ever, saving you time and money. It’s a win-win!

Real estate professionals across Canada, gain new insights into the Canadian housing market from experts in the mix.

At the April 24 Teranet Market Insights forum, Ontario Real Estate Association (OREA) CEO Tim Hudak and Chief Economist of the National Bank Stefane Marion both shared their views on Canada’s current situation.

Housing policy, home prices, and economic outlook were all topics of discussion with important information you won’t want to miss.

After a flat March, the Teranet–National Bank National Composite House Price IndexTM rose 0.2% in April. In the 20-year history of the index it was the fourth-smallest April advance, after those of 2009 (a recession year), 2013 and 2015. There were nevertheless gains in eight of the 11 metropolitan markets surveyed: Quebec City (1.5%), Hamilton (0.8%), Halifax (0.6%), Vancouver (0.3%), Edmonton (0.3%), Toronto (0.2%), Montreal (0.2%) and Victoria (0.2%). The index for Calgary was flat. Indexes for the remaining two markets were down on the month, Ottawa-Gatineau −0.1% and Winnipeg −0.8%.

It was the 14th rise in 16 months for the Vancouver index, which has set records in each of the last five months. However, its recent gains have been smaller than before, which is consistent with the loosening of market conditions apparent from data published by the Real Estate Board of Greater Vancouver. The cooling of the Vancouver index advances has been the most obvious for dwellings other than condos. The Toronto index is down 7.1% from its peak of last July, its decline concentrated in dwellings other than condos. The raw index* for Toronto declined similarly over that period, both for the market as a whole and for the non-condo segment. The index for neighbouring Hamilton market is down 5.2% from August, with declines in six of the last eight months. The index for Ottawa-Gatineau has declined in six of the last seven months, for a cumulative retreat of 2.4% since September. For Calgary it was a fifth consecutive month without a gain. The index for Edmonton has retreated in five of the last seven months. In sum, the composite index in April was down 1.6% from its peak of last August, although it stabilized towards the end of last year.

Thanks to strong advances from April to August last year, the composite index was nevertheless still up 5.6% from a year earlier. It was the smallest 12-month rise since September 2015 and a 10th consecutive deceleration from last June’s record 12-month gain of 14.2%. The April 12-month rise was led by Vancouver (15.9%) and Victoria (11.0%), the only markets with 12-month advances exceeding the countrywide average. They were followed by Halifax (5.3%), Hamilton (4.5%), Montreal (3.9%), Ottawa-Gatineau (3.0%), Quebec City (2.4%), Toronto (1.9%), Winnipeg (1.2%), Edmonton (0.4%) and Calgary (0.2%).

In addition to the Toronto and Hamilton indexes included in the composite index, indexes exist for the seven other metropolitan areas of the Golden Horseshoe. In April, six of the seven (Guelph, Brantford, Kitchener, St. Catharines, Barrie and Oshawa), like Toronto and Hamilton, were well below their various peaks of July, August or September 2017. The exception was Peterborough. Indexes not included in the composite index also exist for seven markets outside the Golden Horseshoe, five of them in Ontario and two in B.C. The indexes for these last two, Abbotsford-Mission and Kelowna, like those for Vancouver and Victoria, were at record highs in April. The same was true of the indexes for Windsor and Thunder Bay. The indexes for Sudbury, Kingston and London were only slightly off peak.

The historical data of the Teranet–National Bank House Price Indices™ are available at www.housepriceindex.ca.

The Teranet–National Bank House Price Index™ is estimated from sale prices recorded in public land registries. All dwellings that have been sold at least twice are considered in the calculation of the index. This is known as the repeat sales method; a complete description of the method is given at www.housepriceindex.ca.

The Teranet–National Bank House Price Index™ is an independently developed representation of average home price changes in 11 metropolitan areas: Victoria, Vancouver, Calgary, Edmonton, Winnipeg, Hamilton, Toronto, Ottawa-Gatineau, Montreal, Quebec City and Halifax. The national composite index is the weighted average of the 11 metropolitan areas. The weights are based on aggregate value of dwellings as retrieved from the 2006 Statistics Canada Census. According to that census**, the aggregate value of occupied dwellings in the metropolitan areas covered by the indices was $1.416 trillion, or 64% of the Canadian aggregate value of $2.207 trillion.

All indices have a base value of 100 in June 2005. For example, an index value of 130 means that home prices have increased 30% since June 2005.

*Note on methodology: The current-month data used to calculate the index are those of closed sales registered in the provincial land registry. To illustrate the home price trend, the published indexes of the 11 metropolitan markets entering into the Teranet–National Bank Composite House Price Index™ are moving averages of the last three months of raw indexes, a procedure that evens out month-to-month fluctuations. More granular monthly data are available upon request, subject to subscription fees. For our full methodology, please visit www.housepriceindex.ca

** Value of Dwelling for the Owner-occupied Non-farm, Non-reserve Private Dwellings of Canada

By:

Marc Pinsonneault

Senior Economist

Economy & Strategy Team

National Bank Financial Group

Teranet–National Bank House Price Index™ thanks the author for his special collaboration on this report.

April showers (or snowstorms as is sometimes the case in Canada) bring May flowers — and in the case of the Canadian real estate market, spring home buying season.

Historically, the highest number of residential listings occur in May. In May of 2016, for example, there was an average of 94,000 listings, according to Canadian Real Estate Association data. May and June also tend to have the highest number of sales, with an average of 52,000.

How can you be prepared for the spring Canadian real estate market? Our top tips can help you get started.

Assess Your Market

The spring home buying season of 2018 could look different from spring buying seasons of years past due to new factors — specifically, rising interest rates and new Canadian mortgage rules. Understanding your real estate market and how they may be affected by these changes is important to being prepared. At the very least, you may receive questions about these changes and if your target market is particularly affected, you may want to look into different products and promotions that could help your clients.

There is an easy way to understand the make-up of your target market — a Demographics Report. For example, the Demographics Report from GeoWarehouse tells you age distribution, marital status of residents, average household income, and much more. Another tool that can help you understand the current real estate market is the Teranet Market Insights report. View the latest edition here.

Reach Out to Your Network

Leading into the spring buying rush is a good time to get your ducks in order, and that might include connecting with your network. There are two main networks you might want to consider, the first being mortgage agents and lenders. Reaching out to your contacts in these fields can help you understand what products they are offering that your clients can access.

The second market you can touch base with before the rush are your leads, prospects, and current clients. Checking in to see how things are going could alert you to new opportunities or you could notify potential clients of opportunity they may not even be aware of — such as the value of their home or comparable sales in their neighbourhood.

Have a Real Estate Marketing Plan in Place

The spring season can be competitive, but you can stand out from the crowd with a solid real estate marketing plan. Knowing where you’ll spend your advertising dollars and having your marketing components, be it real-world or digital, created in advance can save you a lot of time and effort once busy season hits.

Identify the top places for new real estate leads with tools, such as the GeoWarehouse Property Details Report, or the Comparable Sales Report. This data can help you target up-and-coming neighbourhoods and prospects.

Prepare Your Team

If you work with others in your office, make sure you are all on the same page. Understanding who does what and how priorities might shift during the busy season can help you cope when the rush does come. Any tasks that aren’t essential to you can be delegated, giving you more time to work on identifying new leads and working with clients.

Use Technology to Speed Up the Sales Process

Once the spring home buying season is underway, you’ll want the sales processes to be as smooth and efficient as possible. Technology can help with this. For example, GeoWarehouse’s reports, images, and searches make finding property information quick and easy so you’ll be able to identify the value, mitigate fraud risk, and save time and money.

Are you a GeoWarehouse subscriber? If you are a real estate sales professional, you may already have access through your real estate board. If you’re not and would like to become one, learn more about our services at www.geowarehouse.ca.

We’ve also got even more great reports in our online store, including property ownership history, instrument images, surveys, plans and other vital data that could make or break your deal. Get more information at http://www2.geowarehouse.ca/buy-now/.